sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. >> there is a certain logic in the market doing better than the economy here. >> they will keep rates at zero for a long time, maybe forever. >> we are looking for continued improvement in the economy, but the pace will probably slow down now that we had this could bound. >> the fed has been taking about changing its policy for some time. >> this is a secular trend in the dollar that could be 10%, 20% over a 10 year period. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. a simulcast, bloomberg television, bloomberg radio. stock split monday for the bay

area. good morning on sirius xm channel 119, and good morning on bloomberg television. lisa, london closed, a bank holiday. extraordinary. lisa: they know how to do it, right? where is our bank holiday. tom: labor day is like a week from today. is that true? it is awfully late. labor day that late in september? is it the same kind of labor day? lisa: honestly, what are we all going to be preparing for? the transition from our kids playing video games on the computers to going to class on their computers. the uncertainty is so pervasive this time of year, when typically people are ready to get back to school and back to their social lives. tom: i wonder if back to school part of it. lisa and i talked about this up, down and sideways, but we know you all have your stories and your acquaintances as well. , lisa ise big stories

back to the office. this is a raging debate. you see it in new york. this great article featuring jonathan miller of miller samuel over the weekend. facebook and amazon, bully, are they betting up the office -- and amazon, boy are they betting on the office when others are not. lisa: other people are writing the obituary for the office, and still others, big companies saying we are going to prolong the return to the office. we just can't risk it. i am not seeing the death of the office yet when you look at the likes of facebook and amazon. tom: we should point to some of you that don't know the bloomberg way, but it is real simple. when mr. bloomberg and mr. secunda invented the concept here, it was open office. and i was like, yeah, whatever. and i was so wrong. it is amazing. we can go buy the food court, and lisa will whisper to me, you

were terrible today. lisa: that's exactly what i do. for the record -- i'm not even going to go there. i will say you do see a trickle into the city, and people are talking about whether the open office is going to get moved to cubicles. whether you end up with more space in your office. i hear you are going to be getting a big office. tom: i already have the one with the corner view. i've got the corner view overlooking the garbage pickup. lisa: the lack thereof? [laughter] tom: let's do a data check. we've got an extremely important conversation to get your monday started. there's a lift to the market. what is different here in the last 90 minutes is we are now correlated with fixed income. we got green higher on the spx. dow up 32 as well. we've got fixed income yields higher. right now, historic imagery from abu dhabi i believe we have

this. el al 1971, from tel aviv to abu dhabi. this is a historic moment. with the american delegation on anyd, kevin cirilli saying and all of american politics suggesting this is a triumph of mr. kushner. lisa: definitely getting some sort of resolution in the middle east, but i've got to say, a small moment of calm amid a world very much at odds. i think about china and the move they made over the weekend with tiktok, basic -- with basically delaying any deal there. so here is a victory for jared kushner. still a lot of hotspots for me. tom: a lot of items to discuss we can get to sebastien page, but within this image, kevin cirilli suggesting that other member's the persian gulf

community may come to an agreement with israel. mr. kushner i believe flying to bahrain and then qatar afterwards to continue this dialogue forward. the other day idea brought up by experts is this is a more forward united states, buttressing up against chinese investment. ,ou mentioned china and tiktok and we forget that china looks west and across the indian ocean, just to the east of dubai and abu dhabi, where they've had some substantial infrastructure develop and's. -- infrastructure develop and's. -- infrastructure developments. lisa: they have been one of the biggest lenders to developing markets in the middle east and elsewhere, and there are ongoing discussions and negotiations about how they are going to handle that role at a time of growing distress economically. tom: mr. kushner now speaking. i'm uncertain what our feed is right now. , andis abu dhabi again

this is the oil community of uae, where dubai is much more visible. a good way to partition this is dubai is emirates air and abu etihad air.ut -- is have an important discussion. we do that with sebastien page of t. rowe price. your hugely anticipated book out in november, this has been a huge theme of my work here recently. are we over diversified? to the heart of your book, are we too diversified and diffuse in our potential return? tom: i don't think we are --sebastien: i don't think we are. in fact, to me, diversification

fails exactly when we needed it the most. we've just lived through this during covid. you know this, most investors know this, but in the book, i argue that the magnitude and the prevalence of the failure of diversification is very much underestimated, even by investment pros. every time we get a crisis like the one we just had, a big market selloff, people seem surprised that correlations that are normally in the 0% to 50% range jump to the 90% plus range. there are huge investment applications to that. your questions about are we over diversified, i would say i don't think so, but i don't think we are well diversified either. with a focus on those market selloffs, those failed risks, if you will. tom: is mr. buffett buying into diversification with his five trading companies? these are the historic companies of japan, with an absolutely

unique, some would say, over diversified, hyper risk managed industrial structure. is that a constructive diversification? sebastien: i think he is because he's getting international diversification, and it is not clear what he's doing with the currency risk, but he's also potentially getting exposure to that actor -- that factor. he also remains diversified with his cash buffer. the whole idea is that when markets selloff, the way you think you are diversified really doesn't play out. i keep coming back to this idea of downside versus upside diversification. hereffett's case, i think he is increasing what i would call a good aspect of diversification, which is global diversification. lisa: there's also a question of whether bonds provide the same sort of diversification. i should mention that the german

inflation rate fell to -0.1% versus the expectation for a rise of 0.1%, giving an ongoing bid to german debt, u.s. treasuries, this idea of no flexion going forward. is the 60-40 portfolio dead? sebastien: we've been debating the role of treasuries and diversifiers and investment portfolios. -- of treasuries in particular as diversifiers in investment portfolios. that leaves you with the duration factor, the role of treasuries and portfolios. when we hit the zero bound, treasuries are not as good eight everson fire as you would expect or as you would need them to be. i looked at the nominal yield on the barclays global aggregate this morning.

i know you like to talk about nominal versus real yield, but let's just stick to nominal yield. 91 basis points on my bloomberg this morning. 91 basis points on the barclays global aggregate. if we get a selloff, there's high valuations. markets are fragile. we are going through an uncertain recovery. if we get a selloff, what kind of rally can we get in bonds when the starting yield is 91 basis points? lisa: that goes to the warren buffett at, basic diversification is a place to look for income. how much is the currency play the main play here? they look for some kind of haven, and the yen being that stalwart versus u.s. bonds? sebastien: i think you have to begin to look through asset classes to the underlying factors. currencies can play a role in diversification, but you also have to begin to think about hedging strategies. you have to begin to think about more dynamic strategies like

directly managing your volatility. all of these different approaches, including active management and long-short investing become more important in the portfolio in a world where you don't get much diversification from you treasuries. tom: too short a visit. we will have to do this again. in autumn, we will haunt isolate -- we will have a celebration of his book, "beyond diversification." we have mr. kushner landing in abu dhabi and speaking. a historic moment for israel and the united arab emirates. this diversification story is a huge deal. it really cuts both ways. my basic take over the years, we were way diversified. lisa: also, the question is what does diversification mean. is it 60-40, or investing in private assets? they provide bigger fees. whether they will continue to outperform, more of a question. tom: mr. buffett's effort in japan, that is a maximum diversification, and it is into

stronger cash flows. there is serious income dividend growth out of those japanese trading partners. speaking of growth, that would be the suburbs. on housing, this is important. futures up seven. good morning. ritika: with the first word news, i'm ritika gupta. joe biden has accused president trump of fanning the flames of hate and violence. biden spoke after a trump supporter was shot and killed in portland, oregon after a clash with those are testing the shootings of black men and women by police. biden called the violence undetectable. president trump called his supporters great patriots. he and administration officials blamed the violence in portland and other cities on democratic officials. president trump praising shinzo abe as japan's greatest prime minister ever. that is according to a white house readout of a call between the two leaders. the president spoke to abe two

days after he announced he was resigning for health reasons. president trump told abe the u.s.-japanese relationship is better than it has ever been. warren buffett's berkshire hathaway is investing $6 billion in five japanese trading firms. amongst them, makes you be she -- amongst them, mitsubishi and sumitomo. another sign that china's economy is rebounding, one gauge of the services industry hit the highest level this month since early 2018. the manufacturing index slipped slightly, although factories orders -- factories reported that new orders were up. demonstrations in belarus continue against president lukashenko. eu criticized -- the criticized a police crackdown on

protesters afterwards. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> the biggest thing you can take away from chair powell's remarks is a sense of pragmatism. the fed has undershot its inflation target, undershot its

forecast for years, so the idea that this primitive approach is working was a mistake. adam posen,- tom: liked up this morning. a real important monetary discussion about what chairman powell has wrought. we go back to the japanese experiment of 20 or 30 years, and the idea of good deflation, bad deflation in such. the world this morning reacts to the celebration of mr. buffett's 90th birthday, where he looked back to the macy restoration of -- the mage he restoration of -- the meiji restoration of japan. there used to be 12 trading houses. now there's somewhere in the vicinity of five or six.

katherine chiglinsky gets us up to speed on this. she covers berkshire hathaway for us. there's a huge wall of cash. how much of that wall do they use to acquire japan? reporter: technically just a sliver. the stakes were valued at more than $6 billion, but he has a heord $146 billion of cash is working with. while it is just a sliver, i do think the deal for these stakes in some of the japanese trading firms is really monumental in terms of how berkshire is thinking about investments and where they are looking. tom: what is have important, if you look at any of the websites of the trading houses, i want to be clear, only a korean equivalent, and maybe that is it. there's no american equivalent to the breadth and the depth of their ownership, their joint ventures, there across asset

negotiations. is this a bet on these companies, or a bet on the future of japan? katherine: i think, given how big these companies are and the wide range of industries they -- for example, they control one of japan's biggest convenience store chains -- so i think in a way, he is really giving a full sampling of the japanese economy? -- of the japanese economy. lisa: warren buffett has always talked about the dynamism of the american economy. most of his investments are focused here. this is a huge shift from that perspective. does this indicate that warren buffett is moving away from the united states, both in terms of economic growth, as well as perhaps the currency? katherine: i think this definitely signifies he is willing to. he's talked about this before, about how he wanted to do more deals abroad, but people didn't

know berkshire quite as much globally as they might in the u.s., but he's been willing to double abroad before. he bought a japanese motorcycle equipment company. he talked about korean investments before. but i think this really signifies that he is willing to put a lot of money abroad now. he's met some of his investing deputies that have done deals with investment companies in brazil. i think this is sort of an evolution of berkshire. they've gotten really big in the u.s. they have a lot of money to put to work. now they just need to find places where they can get good deals. lisa: the other aspect of this that people find fascinating is the commodity aspect, especially following on the demesne -- on the dominion energy investment, that warren buffett like commodities here. how much is that the take away? katherine: it definitely signifies this is an area he knows well. sprawlingowns a

energy operation. he's been able to put money to work in a financing deal for occidental. it at least signifies that he knows this area, so while he might be stepping outside of the terms ofnfidence in geography, he is sticking with it in some ways in terms of the type of firm. tom: in the time that we have with you, he is a vital 90 years old. reveal with us right now mr. buffett's best outcome for the future of bursar hathaway -- of berkshire hathaway. are there troops on board to take over one day? katherine: there are, and i think moves like this where buffett is stepping outside of what might be his tried-and-true path i think really signifies that he's opening up so that whoever takes over, whether it is greg able or any of his deputies, whoever takes over

will be able to make more deals that are a little different, maybe a little outside of what buffett would have normally done because it reinforces to investors that buffett himself was willing to expand his arise in's. tom: that apple -- his horizons. tom: that apple trade worked out, huh? katherine: back in 2016, everyone thought he was getting into apple really late, and i think just confirmed to us that he was actually not late to the game with that bet. tom: thank you so much. katherine chiglinsky working through this really interesting and important story as well. you really wonder what the jumpstart will be to international investment. this is the kind of events that could be changed. lisa: looking at a 1977 letter that warren buffett wrote, talking about what types of investments he likes and the

criteria. to give you a sense of perhaps some of the calculus that went into this investment, he said, "we want the business to be one we can understand. we want them to have favorable long-term prospects, operated by honest and competent people. that's something that was also cited, this idea that warren buffett can count on the accounting practices of japan. that raises some big flags, especially about china, given some of the controversy with ipo's in the united states. these are some of the criteria he's held to since at least 1977, and these brokerages seem to fit into each of them. tom: what is so wonderful about looking at all of the asian markets, but particularly the japanese market with the confusion of currency, is in one click, you can take the portfolio over to u.s. dollars, and lisa, that is a good and beautiful thing. lisa: it raises the question about the haven asset or the haven aspect of the dollar. the idea that if you want diversification in some sort of

ofge, i downside risk, a lot people saying perhaps the yen gives that to you now more so than the dollar. tom: we will see. a weaker japanese yen today. too-dollar $1.19, not yet up $1.20. you take the dollar out and look at the euro-yen, and that is clearly indicating stronger euro, weaker japanese yen, at ¥1.25 per euro. that moves up to ¥1.26. doing, what a shock, better than the others on a percentage basis. the 10 year yield, a basis point move, 0.73%. really quite distant from where we were pre-powell. and the 30 year bond is a solid seven basis points higher then where we were last week as well.

twos-tens spread really has my attention. that is a breakout to a steeper yield curve. what do you know about real estate? we are all moving. lisa abramowicz is moving to the farms of the adirondacks. good morning. ♪ look here, it's your very own all-in-one

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tom: "bloomberg surveillance." lisa abramowicz and tom keene. jonathan ferro off. yields are higher. , 1.51.30 year bond a little bit of real yield asked. -1.06 on the real yield. right now we are going to turn our attention to one of only two topics. one of them is clearly back-to-school, the other is back to office. hugely qualified as mitchell roschelle, a housing market analyst. we are thrilled he could join us. i want to talk about the new york times article this weekend that everybody in the tri-state area red. we welcome you on bloomberg radio and bloomberg television. housell roschelle

has gone up 200 42% since memorial day. is it really that crazy on the demand to leave the city and go to the suburbs? mitchell: it is that crazy. i do not know if it is up 200%. if it was up 200% there would be movers walking behind me right now, but it is up pretty strong. i live in northern westchester county. houses went on the market late for the home buying season a couple of months ago, already gone. there is a flood of people coming from the city and coming from other cities. one of my neighbors sold a house to somebody from seattle. people are desperately trying to get out of the cities. tom: all of my radar is up. empire state realty, related, they are like you are out of your mind, come back to the city. are we going to be back in the

city? mitchell: i think it is a perfect storm of civil unrest challenges in cities with the high density and the uncertainty of education for children that is creating the angst about whether or not to live in the city. if you look at people buying houses, all of the searches are for one-bedroom larger than the searches a year ago. people are looking for that extra bedroom, whether it be for a home office, a home classroom, and home purchases are permanent decisions or long-term decisions. people are looking long-term and beyond the vaccine. lisa: how is this wave out of the cities compared to september 11, 2001, and other periods when people decried the loss of the city and the death of new york? of those inme hindsight were more temporary. i'm not suggesting this is permanent.

this is certainly longer-term. if you look at the decisions being made by office tenants, by residential tenants about where they want to do business, where they want to live, they seem to be making long-term decisions around something that when we look at it overtime may have been a short-term thing. 9/11,s much longer than stock market crashes, and other things that have slow down the new york economy and got people to move elsewhere. lisa: there is an incredible dissonance with an economy in tatters, the idea we have a double digit unemployment rate, people losing their jobs at a record pace, and housing prices that are soaring, the price of lumber more than tripling since early april. at what point does it start to look frothy? mitchell: it feels a little frothy but i think it is simple supply and demand. you through two macro economic

concepts at me. i think it is supply and demand. we are not making enough new supply of new housing to meet the demand. the fact of the matter is if you go back 10 years, the cumulative household formations, that is when children's move out of their parents house are about 3 million in excess of the housing supply we've created. we have a lack of supply that will continue to drive prices higher. your career is around the commercial aspect. perceive will be the societal future of commercial real estate? mitchell: i think there is still demand for the office. i think what you will see happen in the near term is we will spread out the offices. cfos,ou talk to ceos and

i just dropped the whole c-suite on you, about all of their needs going forward, half of them say we need more space to socially distance and the other half say we have too much space. the more is interesting, because we will see companies move out of the one building model they may be in and move into multiple buildings. lisa, you mentioned 9/11. i think that is what happened after 9/11. you did not want to be concentrated in one place. what that does do with people moving to the suburbs is create demand for suburban office. we will see that kind of thing popping up soon. michael: what is -- tom: what is the symbolism of facebook taking out moynihan across madison square garden. i get it is a statement they are making about technology. can you extrapolate forward to the digital dominance in their desire to keep the kids happy? a hardl: i am having

time reconciling company's decisions to not return to the workplace well beyond when we would expect a vaccine to be there. some of the tech names have said do not come back until the end of 2021. those are the shocks you are seeing in the commercial office space. they do not know how to deal with those companies that are viewed as root leaders and whether or not other companies will follow. as we get closer to a vaccine or on the other set of a vaccine, what do employers do vis-a-vis their people in terms of bringing them back? we were joking before the break. i think all of us are hankering to get back to the office. the workers want to get back. it is whether or not from a safety perspective employers are comfortable doing that. lisa: on the valuation side, there is also a question of who the buyers will be. you have extensive experience with international investors. how much are international investors sticking with their

investments in the big u.s. cities? i think it is tied to the fact that at least hopefully for a long time the u.s. is a reserve currency. when you look at the way foreign investors allocate capital, they by u.s. treasuries. when they want more yield, they by other investments and hard assets that generate yield. one of the things we have looked at overtime is the fact that the more volatile the planet is, the more investors like hard assets. ity are not looking at purely on the fundamentals. they are looking at it as a long-term wealth preservation play, and real estate over the long-term has done better than stocks and bonds in some respects. i think they will stay put with real estate. lisa: our shopping malls and hotels still capital preservation plays? mitchell: that is a challenge. i think they are two different baskets.

there is the transactional nature of the lodging industry. i think retail has more of a fundamental issue. we have 10 times more retail space in the united states than japan does on a per capita basis. and this isretailed one of the tough blows to realize we have too much space. chris verrone just put out a note and he said -- is inflationary. real estate participate in a pending powell reflation? mitchell: the question is if there is enough demand when businesses are struggling. apartment rents will be inflationary because of the supply and demand dynamic. i question whether or not businesses have the capacity to pay inflated rents over time. tom: this is the heart of the matter.

you have to make more money. some of the realities of new york city real estate is the incomes are not there to support the rent. is that where we are? does the wage growth stop there and the revenue growth stop there for businesses? mitchell: we have talked on the air in the past about the fact you have all these for rent signs in retail across new york city. i think ultimately landlords will have to lower their asking prices to get tenants if they want to fill the space. there is not enough commerce to support that high rent asked. i think you will see falling rent prices or a lot more for rent signs. lisa: is at the same story on the residential side? how much further can we expect values to fall in manhattan real estate? mitchell: you will see rents fall. there are high-quality apartments in new york city that

have enjoyed a 90% occupancy level for a long time, which has given landlords the ability to raise rents. i think landlords will have to give that back and give concessions to get folks in. every year there is a new crop of seniors graduating college that are dying to live in new york city and four of them and fill up one bedroom a year ago, maybe four of them philip a two bedroom and that is the new model. the demand is there. the question is will the jobs be there, and will the kids be working at home or working in an office? tom: that is dead on. that is the way lisa and i are living. four in a bedroom. lisa: i do not know about you. what is going on? tom: you are here. who did you bring home? mitchell roschelle, thank you very much. looking forward to speaking with you.

it is a huge deal and it is coast-to-coast. lisa: there is a question in new york. i read an article that people are prioritizing outdoor space. apartments that have a two inch by two inch terrace are going for a higher value. tom: for all of you nationwide, i have to say this new york times article this weekend with john miller was huge, the zeitgeist was huge. frantic bidding wars. lisa: people have written off new york city. the town is saying you have urban flight, this is a return to the suburban glory days. the jury is still out. that is the major issue. tom: i would pay attention to private enterprise employers like jeff bezos and mr. zuckerberg and dare i say, mr. bloomberg as well for the commitment to new york city. futures up four. a little bit of a lift in markets. the vix ought, this has to do

with serious short dynamics, up on the vix, 24.50. yields are higher. stay with us on bloomberg radio and bloomberg television. a simulcast. this is "bloomberg surveillance. ritika: with the first word news, i am ritika gupta. president trump calls for law and order in a tweet storm following the death of one of his supporters in portland, oregon. the man was killed in a clash between trump supporters and black lives matter organizers. caravan shooting teargas and paintballs. some say the president encourages unrest because he sees that as a crutch for his campaign. president trump's intelligence chief is defending his decision to restrict rational briefings on foreign interference in u.s. elections. he says he will primarily brief between written materials, but

he rolled out all member briefings. democrats say he's only doing president trump spitting. the head of the u.s. food and drug administration promises transparency when it comes to reviewing potential coronavirus vaccines. he tells bloomberg's data will dictate what kind of decision will be made. president trump has accused the fda of slowing vaccine and drug work to hurt him politically. another sign of improving diplomatic relations in the middle east. the first commercial flight from israel has landed in the uae. to get there the plane went through saudi arabia and airspace, another first for the airline. agreedand the uae have to formally establish diplomatic relations. legendary college basketball coach john thompson has died. --mpson coached jordan pound coached george pound and became -- georgetown and became the first lack coach to win a title in 1984.

he developed patrick ewing and alonzo mourning. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> there is a posturing game. i expect we will get something done, but there is some risk to the consumer if we do not get

the bill over the finish line. we are thrilled he could be with us talk about the markets. dow futures up 23. this will be a lot of fun. michael dowse. if there is a glass court, there is a certain ball, or a clay court, there is a certain ball, and then there is hard court tennis. wilson and michael dowse have on that for four decades. you use wilson tennis balls and nothing else. he was so good at it the united states tennis association dragged him into their combine to keep tennis magic going. we are thrilled michael dowse could join us. the background screaming every third head. congratulations on keeping it going. what have you learned from the

other sports about what not to do in this u.s. open? michael: not to take it lightly. thanks for having me on the show. it is true the court is hidden away, hopefully it is not too noisy. what we learned is we have to take this serious and never take anything for granted and have great partnership and teamwork with the federal government, the city of new york and the state government. a lot of moving parts and we have to pull this together to ensure a safe and healthy tournament. tom: there are jump conditions for tennis. it has always been that kind of sport. there was a guy named james connors who had a wilson racket two years ago and leveled the way the sport is played. are you at a point of innovation ? is tennis ready for a new jump condition of skill and speed? michael: i think the game has evolved over the years. the amount of athleticism is incredible.

tennis is one of the few sports you can start when you're five and six years old and you can play in your 80's. we hold tournaments for 80 and over. it is not only the greatest athletes in the world, but all people who play our sport. lisa: when you think about tennis you think about two people on opposite sides of the court. they will be naturally socially distanced. what have been the challenges to bring tennis professionals together at a time of the raging pandemic you had not thought about before? michael: there was a lot of international cooperation and working with the pro tour. we have players from over 60 countries. the dynamics we had to work with are different than the professional leak in the u.s.. we had to get collaboration from several governments in europe, not just to get the athletes in but ensure we could get them back to europe after the tournament. we had to work with the city of new york in the state of new york to make sure our health protocols were button down and perfect. there has been a lot of

controversy over crowd noise. haskeene has benefited -- demonstrated his own version. are you going to have it silent or are you going to engage in some kind of crowded environment that is manufactured? michael: i am a fan of crowd noise. the more crowd noise the better. without fans on site, we have partnered with ibm to come up with taking crowd noise from last year. they run their ai magic to this year and this year it will simulate crowd noise from last year. forhink it will be unique what some of the other sports have done. tom: how you get america back in tennis? there is this crying need to get america reengaged in what is now an international sport. how do you do it? michael: could not agree more.

tennis is so important to the u.s.. u.s. tennis, we have to get it going. what i'm excited about, the pandemic could be what billie jean king and bobby riggs were -- tom: in what way? backel: we just got news that tennis participation for entry-level players has doubled in the last two months. in quarantine you did not get any exercise or socialize or have intellectual stimulation. you go out to tennis courts and you can have all of those benefits. sales forket entry-level tennis rackets nearly doubled in the last three months. we see tennis coming out of this with the big boom. lisa: have you seen a financial hit from the lack of live games and games that could be broadcast, or are you seeing a boom on the other side because of the ability to do this sport with social distancing? michael: as far as the industry,

it is coming back strong after being shut down. entry-level tennis is where it is taking off. it is a challenge this year. without fans, our net income will be down about 80%. it is a big hit for us this year. even with that, we have had some toerves, we are able continue and offer equivalent prize money to last year and keep the operation going. tom: the only way we will keep this going is next time i want john mcenroe in the background. michael dowse with united states tennis administration. thank you so much. lisa, that was great. do your point about the inherent social distancing, that has to be good. lisa: you want somebody throwing a tennis racket behind him. that is what you're looking for. tom: that would be john mcenroe. this weekend someone observed

that ohio state is not playing football, but high schools in ohio are playing football. things are bizarre. lisa: and you also wonder, we talk about whether the office will return. you have to wonder about the state of some of these college athletic towns, the college football towns that live and die by the football season, or all of these colleges that bring in the revenue based on their teams and how much will that get revived. see u.s.ee -- will we open as the next super bowl? tom: let's get back to the markets. futures of three, dow futures up 21. interesting to see what tech does. what are you looking at? lisa: i am watching the difference we are seeing with equity performance and credit performance. we had been seeing credit perform as well as equities this past month, that is fascinating. even as you see all-time highs

in the s&p come easy spreads grind tighter but not that big of a deal. it raises questions if people are concerned about the fundamentals. other people are saying there are signs of froth in the equity space. tom: supposed to be a quiet august but it is not. labor day a week from now. british markets are closed for the bank holiday. it will be a most interesting week. many people recalibrating being behind in the markets and how you catch up. we will try to do that with chris marangi. look for that in the next half hour on bloomberg surveillance on radio. thank you for your many comments on our simulcast on bloomberg television and radio. it has been a great experiment through the summer and we will keep it going. upures up three, dow futures 24. curve steepening this morning. please stay with us.

this is bloomberg. good morning. ♪

♪ taylor: from new york city for

our viewers worldwide, i am taylor riggs in for jonathan ferro. the captain to the open starts right now. we begin with the big issue. stocks on track for their fifth consecutive month of gains. investors wondering how much more room is left to run. >> markets making new highs every day. >> seeing the russell 2000 perform better. >> we are seeing certain things that will support the market going forward. >> the covid recovery efforts we are seeing. >> the data remains good. >> it should not be a record high given the amount of uncertainty. >> volatility comes back because of the election. >> we are still in the midst of a pandemic. >> the fragility of the american consumer. >> a substantial number of people are still unemployed. >> we do not know when we will get another stimulus package. >> a lot of hope embedded in the market there is a v-shaped economic recovery. >> there is room to run. >> there was a lot